ELSEVIER
Environmental Management by Marketing
Decision-Makers in Financial Services
Terry Clark
EMORY UNIVERSITY
Daryl McKee
LOUISIANA STATE UNIVERSITY
This research investigates the efforts of marketing decision-makers in the
financial services industry (savings & loan associations) to manage their
environments during the turbulent period of deregulation. Two distinct
forms of savings & loan governance, stock and mutual, suggest different
orientations toward the environment and therefore toward strategic action
aimed at managing that environment. The study found general support
for the notion that form of governance was a significant factor in the use
of environmental management strategies. © 1997 Elsevier Science
Inc. j BUSNaES 1997. 38.161--170
he environmental management concept implies that
T business decision-makers can develop strategies that
influence or shape their external environments to better
suit their objectives and improve performance. Operationally,
an environmental management strategy emerges in response
to three critical questions (Clark, Varadarajan, and Pride,
1994): (1) is it possible to influence the environment; (2) can
the environment be influenced in significant ways; and (3)
are the costs of managing the environment proportionate to
expected benefits?
Although formal discussion of environmental management
in the marketing literature began with Zeithaml and Zeithaml
(1984), its elements have been around for much longer, em-
bedded in the assumptions undergirding many strategic mar-
keting tools. Such underlying assumptions give a deterministic
bias to the tool insofar as they lead decision-makers to pre-
scribed responses, excluding the possibility that strategic action
might produce changes not encompassed by the tool. For
example, with the product life cycle (PLC), identification of
stage of the PLC assumes acceptance of certain "facts" about
the environment, and a prescribed strategic response is recom-
mended. Thus, if a product is deemed to be in the decline
Address correspondence to Terry Clark, Assistant Professor of Marketing,
Roberto C. Goizueta BusinessSchool, Emory University, Atlanta, GA 30322.
Journal of BusinessResearch 38, 161-170 (1997)
© 1997 Elsevier Science Inc.
655 Avenue of the Americas, New York, NY 10010
stage, competitors are assumed to be few, industry capacity
in excess, and customers to be laggards (Smallwood, 1973)
with the strategic implication that " . . . marginal competitors
either drop out, merge or sell out . . ." (Day, 1975, p. 9).
Numerous scholars have noted this implicit determination in
the PLC (e.g., Dhalla and Yuspeh, 1976; Varadarajan, Clark,
and Pride, 1992). Similarly, the growth-share matrix leads its
users into an implicit assumption that market growth rate is
an exogenous environmental variable, around which strategic
reaction is to be formulated. (Varadarajan et al., 1992).
The main achievement of Zeithaml and Zeithaml (1984)
was to challenge the deterministic bias in many marketing
tools, arguing that under certain circumstances, organizational
environments can indeed be influenced and that marketing
strategies are central to achieving this. Thus, for example,
firms craft public relations and political lobbying programs
to help create a more favorable legislative environment for
themselves (Paine and Anderson, 1983).
Thompson and McEwen (1958) were pioneers in describ-
ing the basic types of strategies likely to effect environmental
change: competitive aggression, cooperation, cooptation, and
coalition formulation. This conceptualization has endured and
is the basis for most subsequent research in the area (see, for
example, Aldrich, 1979; Daft, 1983; Paine and Anderson,
1983). The most systematic discussion of environmental man-
agement strategies is found in Paine and Anderson (1983)
and Zeithaml and Zeithaml (1984) (see Figure 1), where three
broad classes of environmental management strategies are de-
scribed: (1) independent strategies--efforts by individual or-
ganizations to influence their competitive environments; (2)
cooperative strategies--efforts by groups of organizations to
influence their common environment; and (3) strategic ma-
neuvering--efforts aimed at relocating the organization within
the product-market environment.
If the view of Zeithaml and Zeithaml (1984) that environ-
mental management is primarily a marketing function concern
requires confirmation, a cursory examination of Figure 1 re-
ISSN 0148-2963/97/$17.00
PII S0148-2963(96)00075-6
162 J Busn Res T. Clark and D. McKee
1997:38:161-170

I. Iftdanenden| Strateoies The consensus is that while deregulation benefited the

A. Competitive Aggression
I. product differentiation banking and securities industries, it hurt the S&Ls. However,
2. aggressive pricing deregulation per se seems not to have been the root cause,
3. comparative advertising
B. Competitive Pacification but rather the occasion of the crisis. According to Benston
I. helping competitors and Carhill (1994), it was a combination of interest rate dereg-
2. industry advertising campaigns
3 . price umbrellas ulation and moral hazard associated with underpriced deposit
C. Public Relations insurance and economic value insolvency that led to the disas-
D. Voluntary Action
I. raising of switching costs ter. At any rate, the events of the 1980s " . . . transformed
2. providinginformation to regulators the competitive environment [for S&Ls] from placid . . .
E. DependenceDevelopment
F. Legal Actions to uncertain and dynamic . . ." (Haveman, 1992, p. 55),
G. Political Action necessitating the Financial Institutions Reform, Recovery and
I. corporate constituency programs
2. issues advertising Enforcement Act of 1989--the Thrift Bailout Bill. In this com-
3, lobbying
H. Demand Smoothing plex and confusing environment, individual institutions
I. Demarketing fought to keep afloat. An important part of their struggle
II. Coooerative Strateolas involved the use of environmental management strategies.
A. Implicit Cooperation The literature describes turbulent (Emery and Trist, 1965)
B. Co-optation
C, Coalition Formation and hyperturbulent (McCann and Setsky, 1984) environments
in which the relationships between cause and effect change
III. Strateaio Maneuvering
A. Domain Selection with increasing rapidity, making it difficult for decision-mak-
B. Diversification ers to predict the consequences of their actions. This was the
C. Merger and Acquisition
situation S&Ls found themselves in the 1980s as they wrestled
Figure 1. Environmental management strategies. with interest rate increases in the context of sometimes inscru-
table, sometimes irrational legislation, new competitive forces,
and scandal.
veals that most strategies fall squarely within the traditional
domain of marketing. This merely underlines what has long
been recognized--that the marketing function is the firm's
S&L Governance and
key interface with its environment (Hutt and Speh, 1984; Environmental Management
Lysonski, 1985). Agency theory describes how principals (i.e., owners) entrust
In this study we analyze efforts by savings and loan (S&L, their resources to agents (i.e., managers), because they lack
or thrift) associations to manage their environments, using time and expertise to do it themselves. The theory seeks to
environmental management strategies during the deregulation understand the "agency problem," which arises because princi-
period of the mid-1980s. The analysis also examines whether pals cannot easily verify that agents are acting in their best
differences in type of governance affected these efforts. To interest. "Moral hazard" results because agents are in position
achieve this, the balance of the article is divided into five to cheat on their principals by failing to do all spelled out in
sections: (1) a brief discussion of deregulation and of the thrift their contracts to achieve the principal's objectives.
crisis; (2) a discussion of the governance structures in the S&L At the heart of the principal's problems are the costs of
industry and their effects on environmental management ef- dealing with moral hazard--of monitoring and measuring the
forts; (3) a description of the study and its results; (4) a agent's behavior, the outcomes resulting from that behavior,
discussion of the findings, their implications, and limitations; and of transferring the associated risk to the agent (Bergen,
and (5) a brief agenda for future research in the area. Dutta, and Walker, 1992). Moral hazard is dealt with by
issuing either: (1) outcome-oriented contracts, which make
Environmental Change in agents responsible for producing prespecified, measurable re-
sults, eliminating the principal's need to actively monitor their
Financial Services actions; or (2) behavior-oriented contracts, which obligate
Deregulation is ostensibly aimed at benefiting consumers agents to perform certain easily observable duties (e.g., open
through reduced prices, higher quality, and increased choice, the store at 8:00 AM., smile at customers, and tell them "have
and to benefit industry through the discipline increased com- a nice day").
petition fosters. Reflecting this, deregulation in the financial S&Ls lend themselves to agency theory analysis because
services industry (beginning in the early 1980s) is generally of two forms of governance found in the industry: stock own-
acknowledged to have had four related effects (Donnelly, ership and mutual ownership. Table 1 draws out the salient
Berry, and Thompson, 1985): (1) a substantial change in market differences between these. For example, under stock gover-
structures; (2) increase in competitive intensity; (3) prolifera- nance, S&L principals are the stockholders and agents are the
tion of new products; and (4) scramble for new markets. management, whereas under mutual governance, principals
Environmental Management by Marketing Decision-Makers
Table 1. S&L Governance
Agent Growth
Remuneration Mechanism
Stock Bonusesfrom capital gains Issuanceof new stock
Mutual Nonsalary benefits Limited by regulation and
number of deposits
are the depositors. For practical purposes, this means that
principal power in mutuals is too diffuse to exert any real
control over agents. Similarly, whereas mutual growth is lim-
ited by level and quality of deposits and capital reserve require-
ments, stock growth is theoretically unlimited as new stock
issues are possible.
Moreover, although agent performance is not readily visible
to mutual principals (depositors), stock agents are under the
direct oversight and control of their principals (stockholders)
who can easily assess performance (earnings per share). Gen-
erally speaking, mutuals solve their agency problem using
behavior-oriented contracts, and stocks use performance-
oriented contracts.
Numerous studies have identified links among form of S&L
governance, risk orientation, and performance. For example,
stocks have been found to be more aggressively managed
(Simpson and Kohers, 1979), more efficiently managed, more
likely to take on higher risks, and generally more profitable
than mutuals (Kohers and Simpson, 1984; Verbrugge and
Goldstein, 1981). Governance structure has also been found
to affect S&L strategic decision-making (Rao and Neilsen,
1992). Whereas mutual agents are more insulated from inter-
ference by principals and are therefore less likely than their
stock counterparts to be performance-driven, they are not any
more insulated from the effects of their environments.
As deregulation unfolded, thrifts experienced increased
competition along three lines: (1) they had to compete more
aggressively among themselves for traditional (mortgage) cus-
tomers, with traditional products (home loans); (2) they began
to compete with new competitors (primarily commercial
banks) which had invaded their traditional domain; and (3) in
response, many thrifts began venturing into product/markets
previously off-limits to them. Many mutuals met these chal-
lenges by converting to stocks. They did so because the mutual
governance structure began to handicap them in numerous
ways: (1) management was not effectively monitored or con-
trolled by owners; (2) aggressive growth-oriented strategies
were not possible; and (3) management was unlikely to engage
in entrepreneurial behavior. Although the environment was
unfriendly to all S&Ls, it was particularly difficult for mutuals.
Given the matrix of constraints encumbering them (rewards,
growth, governance), mutual decision-makers were more
likely to perceive deregulation as threatening than was the
case for their stock counterparts. This systematic variation in
J Busn Res 163
1997:38:161-170
Agent's Agent's Principal's Solution
Job Expected Risk Expected Risk to Agency
Vulnerability Orientation Orientation Problem
High Risk-seeking Aggressive Outcome-oriented
contracts
Low Risk-averse Passive Behavior-oriented
contracts
interpreting deregulation was likely to affect how and to what
degree S&Ls attempted to manage their environments. Thus,
HI: Form of governance moderates the relationship be-
tween perceived threat of deregulation and the use of
environmental management strategies.
Reflecting this aggressiveness, stocks were more likely to
act to stabilize and control their environments by the most
promising means. The most proactive high-risk of the environ-
mental strategies are the competitive aggression strategies--
product differentiation, aggressive pricing, and comparative
pricing. These were high risk for thrifts because they set aside
the noncompetitive industry traditions to seek market share
gains from other thrifts. Thus;
H2: Use of competitive aggression strategies is greater
among stocks than mutuals.
In the chaotic environment of the 1980s, thrifts were sub-
ject to much ill-conceived legislation, which made their envi-
ronments' changes difficult to understand and to navigate.
One way of dealing with this uncertainty was to try to influence
the legislative process itself by: (1) organizing stakeholders to
political action on behalf of the industry (corporate constitu-
ency programs); (2) arguing the industry's case in the media
(issues advertising); and (3) attempting to influence lawmak-
ers directly (lobbying). Stock managers, driven as they were
by their principals to perform, were more likely to see purpose
and reward in this type of political action than were their
mutual counterparts. Mutual managers did not have this pres-
sure acting directly on them. Thus,
H3: Use level of political action strategies is greater among
stocks than among mutuals.
Prior to deregulation, thrifts had protected markets. These
protected markets constituted a sort of industry public good,
in the sense that industry members had a common set of
interests. These interests were best served by the mutual form
of governance, because a less aggressive management style
was consistent with preserving the industry status quo. This
argument gains credence from consideration of the fact that
prior to deregulation, most S&Ls were mutuals. However,
deregulation eroded much of this common interest as intra-
industry competition increased. Clearly the two forms of gov-
ernance were not equally suited to the increased intra-industry
164 J Bush Res
1997:38:161-170
competition. By the end of the 1980s, most S&Ls were stocks.
Stocks were best suited to motivate managers to abandon
traditional cooperation in favor of competition.
Mutuals were less well suited to the increase in competition.
Indeed, their governance structure was more likely to induce
them to retain and strengthen their common interests with
other S&Ls. These interests remained regulatory constraint,
stability, and their corollary, low competitive intensity. Coop-
erative efforts took the form of three related types of action:
(1) implicit cooperation with other S&I_s; (2) the co-optation
of important environmental factors; and (3) the formation of
coalitions of various types. Therefore,
H4: Use of cooperative strategy is greater for mutuals than
for stocks.
Increased competition changed the industry, forcing S&Ls
into new markets and pressuring them to develop new prod-
ucts. The more proactive SgrLs used strategic maneuvering to
innovatively redefine what they did in: (1) selecting product/
markets to compete in (domain selection); and (2) merging
with and acquiring new firms. Limited as they were in real
growth possibilities to the number of new depositors, and in
strategic aggressiveness by their reward structure, mutuals
were not well suited to the venturesome task of product/
market redefinition. On the contrary, their interests lay in
consolidating and protecting traditional turf.
On the other hand, stocks were well suited to strategic
maneuvering. Taking a cue from their new competitors--
commercial banks--stock managers were more likely to em-
brace the possibility of enhancing performance. They could
achieve this internally by product/market redefinition or exter-
nally by mergers and acquisitions. As competition with other
thrifts intensified, risk-tolerant stock managers were more
likely to experiment with new products, markets, and organi-
zational configurations to stay profitable (and of course, to
keep their jobs and earn bonuses on top of their salaries).
Therefore,
H5: Use of domain selection strategies is greater among
stocks than among mutuals.
H6: Use of acquisition strategies is greater among stocks
than among mutual SgrLs.
The Study
A mail survey of 319 SgzL marketing directors was conducted
in 1986. Subjects were drawn randomly from a listing of some
3,000 S&L marketing directors supplied by the Financial
Institution Marketing Association (FIMA) of Chicago. Al-
though this sampling frame represented only about 10%
(33,000 in 1986) of S&Ls nationwide, it was attractive for
this study, because inclusion on the list indicated at least
a moderate degree of professional marketing sophistication
(which was not always the case in financial services in the mid-
1980s). Because this study is an investigation of environmental
T. Clark and D. McKee
management by marketing decision-makers, it was felt that
the association with FIMA was important. Total response rate
for the survey was 134 (42%), of which 127 (39.8%) were
usable. An evaluation of nonresponse by geographic region
and asset size indicated no significant differences from respon-
dents.
Snow and Hambrick (1980) identify four major approaches
to the measurement of strategy: (1) investigator inference, in
which researchers use their judgments to identify strategies
used; (2) external expert assessment, in which a panel of
industry experts are asked to identify strategies used; (3) objec-
tive industry and economic indicators, in which "hard" data
such as stock market indices are used to identify strategies
used; and (4) decision-maker self-typing, in which involved
decision-makers are asked to identify strategies used. None
of these methods is entirely satisfactory. However, whereas
the first three assess strategy indirectly, by second guessing
(so to speak) what goes on in the mind of the strategist, the
last has the obvious merit of directness--asking those who
made a decision what the decision was. Thus, because self-
typing makes the fewest assumptions, it was used in this study.
Marketing directors were provided with brief descriptions
of 17 environmental management strategy items (see Figure
2), based on Zeithaml and Zeithaml (1984). These items were
used to develop aggregate measures of the three general ap-
proaches to environmental strategy suggested by the literature
(independent environmental strategy, cooperative strategy,
and strategic maneuvering strategy). Individual items were
measured using the marketing director's response to brief
descriptions of each strategy. Subjects were asked to assess
the importance of each particular strategy for their company.
They were also asked to indicate their own level of involvement
with a particular strategy. In each case, five response categories
"of major importance," "of above average importance," "of
average importance," "of less than average importance," and
"of no importance" were provided.
Aggregate measures for each class of environmental strategy
were obtained by summing the responses of each marketing
decision-maker across the appropriate items. The perceived
threat level was measured by adding the responses to three
items (5-7 in Figure 2). Form of governance was identified
using Sheshunoffs (1989) S&L guide.
Measures of the six survey-based constructs were devel-
oped by averaging the items for each construct. Coefficient
alpha, an indicator of reliability, was calculated to evaluate
internal consistency. Whereas five of the six measures evi-
denced reasonable reliability, with 70 to 80% of the variable
attributable to a common source, coefficient alpha for compet-
itive aggression was 0.55, suggesting its two items were a less
than reliable measure of this construct (see Table 2).
The 17 items relating to S&L strategic marketing practices
and to the perceived threat posed by deregulation were ana-
lyzed to identify underlying relationships among the variables.
An unconstrained maximum likelihood factor analysis and
Environmental M a n a g e m e n t by M a r k e t i n g Decision-Makers
1.
2.
3.
4.
5.
6.
7.
8.
9.
Figure 2. Names of strategic measures.
10.
11.
12.
13.
14.
15.
16.
17.
varimax rotation were used to facilitate interpretation of the
factor loadings. The analysis identified six factors with eigen
values greater than one. Together these explained 71% of
the underlying variation among the 17 variables (Table 3).
Separation between factor loadings suggested five distinct con-
structs.
The first factor, accounting for 24% of the variation, loaded
heavily on four items relating to domain selection. The second
factor, accounting for 14% of the variation, loaded on the
three perceived threat items. Factors 3 through 6 loaded on
items relating to cooperative strategy, political action, acquisi-
tion strategy, and competitive aggression, respectively.
Moderated Regression Analysis
To explore the effect of governance structure on study vari-
ables, mean differences in perceived threat from deregulation
were examined. The results show no significant difference
between stock and mutual managers, with mean perceived
threat levels of 2.69 and 2.62, respectively. However, further
analysis revealed a somewhat different picture.
The first hypothesis of the study, that form of ownership
moderates the relationship between perceived threat of dereg-
ulation and use of environmental management strategies, was
tested using moderated regression analysis. This portion of
the analysis was conducted following the two-step procedure
recommended by Sharma, Durand, and Gur-Arie (1981).
To test the role of governance structure as a moderator in
J Busn Res 165
1997:38:161-170
Identifying and selecting lucrative new target markets.
Developing a newer and broader range of services.
Identitying new, nontrsditional areas, services, and products.
Withdrawing from certain markets where potential seems limited.
Deregulation is a dangerous issue for my industry.
Deregulation is a threatening issue for my industry.
Deregulation has been injurious to my industry.
Formalizing relationships with suppliers and customers by negotiating
contracts.
Bringing outside regulatory agencies, customer or industry groups into your
company to sit on committees or advisory boards.
Publicly advertising your firm's opinion about certain aspects of deregulation.
Committing a portion of your firm's resources to certain interest groups,
causes, or social problems.
Lobbying efforts at the federal, state, or local levels.
Contributions to political action committees related to deregulation.
Planned acquisition of other nonrelated organizations, services, or
products.
Planned acquisition of other related organizations, services, or products.
Advertising aimed at comparing your company's services to your competition.
Aggressive pricing.
the relationship between perceived threat from deregulation
and strategic emphasis, two sets of regression analyses were
conducted. First, regression analyses predicting each strategic
emphasis were conducted using governance structure (as a
dummy variable), assets (as a control variable), perceived
threat from deregulation, the interaction of governance and
assets, and the interaction of governance and perceived threat.
Assets were used as a control because earlier exploratory t-tests
indicated significant differences between mutual and stock
assets.
Domain Selection
As Tables 4 and 5 indicate, no evidence of an interaction
between the predictor (perceived threat from deregulation)
and the proposed moderator (governance structure) was
found. Indeed, there is no evidence of a statistically significant
relationship between form of governance, assets (as a control
variable), and perceived threats of deregulation, with interac-
tions, on the one hand, and with emphasis on a domain
selection strategy, on the other.
Cooperation
Whereas the full model including assets was not statistically
significant, the trimmed model including governance struc-
ture, perceived threat of deregulation, and their interaction
as predictors of strategic emphasis on cooperation was statisti-
166 J Busn Res T. Clark and D. McKee
1997:38:161-170

T a b l e 2. Correlations and Summary Statistics

1 2 3 4 5 6 7

1. Domain selection
2. Cooperation 0.26 a
3. Political action 0.19b 0.47 ~
4. Acquisition 0.38a 0.24~ 0.22a
5. Competitive aggression 0.29a 0.17 b 0.14 c 0.03
6. Perceived threat 0.01 0.17b 0.08 0.06 0.16 c
7. Form of governance 0.17b 0.06 0.03 0.30 a 0.21b 0.04
Mean 4.03 2.44 3.14 2.92 3.36 2.60 1.35
SD 0.77 0.74 0.99 1.05 0.91 0.86 0.48
Coefficient alpha 0.85 0.70 0.75 0.74 0.55 0.80 --

~Significant at the .01 level.

Significant at the .05 level.
• Significant at t h e . 10 level.

cally significant at the .05 level (Table 4). The coefficients
associated with governance structure and its interaction with
the perceived threat of deregulation were also both significant
at the same level. Given that governance structure is not
correlated with perceived threat of deregulation (Table 2),
these findings suggest governance structure is a "pure" moder-
ator in the relationship between perceived threat of deregula-
tion and emphasis on cooperative marketing strategies.
Political Action
The results of the model predicting political action were quite
similar to those for cooperation. In the trimmed model, coeffi-
cients relating to governance structure, perceived threat of
deregulation, and their interaction were all significant at the
.05 level, although the overall model was significant at only
the. 10 level. The full model was also significant at this level,
but the coefficient relating to assets was not statistically signifi-
cant. Thus, based on the same argument as above, the results
indicate that governance structure is a "pure" moderator in
the perceived threat-political strategy relationship.
Acquisition
Whereas the overall equations, both full and trimmed, were
statistically significant, the lack of significance among coeffi-
cients for individual predictors precluded a finding that gover-
nance moderates the perceived threat-acquisition relationship.
Competitive Aggression
Finally, both the full and trimmed models predicting competi-
tive aggression were statistically significant at the 0.01 level.
Further, the only statistically significant coefficient in either
model was the one pertaining to the governance-perceived
threat interaction. Again, this indicates that governance struc-
ture is a "pure" moderator in the perceived threat-competitive
aggression relationship.
Overall, there is evidence that governance structure is a
"pure" moderator in the relationships between perceived
threat of deregulation and emphasis on cooperative, political
action, and competitive aggression marketing strategies. These
findings provide general support of H1.
Comparison of Means
The remaining five hypotheses of this study, which suggest
that stocks emphasize independent strategies and strategic
maneuvering and that mutuals emphasize cooperative strate-
gies, were tested with t-test statistics comparing the means of
the strategy variables for organizations of each governance
structure (see Table 6).
The results support H2, suggesting the level of competitive
aggression is greater among stock than mutuals. The mean
level of competitive aggression among stocks was 3.60, signifi-
cantly different from the mean of 3.21 for mutuals at the 0.5
level.
The analysis did not support H3. The level of political
action of stocks (mean = 3.18) was not significantly greater
than that among mutual S&Ls (mean = 3.11). Nor did the
results support H4. The level of cooperative strategy was lower
among mutuals (mean = 2.40) than among stocks (mean =
2.50). This difference, although not statistically significant,
was contrary to the direction hypothesized.
The evidence for differences in strategic maneuvering was
strong. The results supported H5; i.e., that domain selection
strategy usage is greater among stocks (mean = 4.22) than
among mutuals (mean = 3.93) S&Ls, and H6, that acquisitions
was greater among stocks (3.37) than among mutuals (2.72).
Discussion and Limitation of Findings
The early 1980s was a time of unprecedented change for
S&Ls, fundamentally reshaping how they did business. Casu-
alties were high, and many thrifts either went under or were
taken over. This study provides insight into the strategic be-
havior of survivors. A central postulate of the study is that
thrifts were able to increase survival chances by redefining
and reshaping their environments.
Environmental Management by Marketing Decision-Makers J Busn Res 167
1997:38:161-170

Table 3. Factor Analysis

Factor 1: Factor 2: Factor 3: Factor 4: Factor 5: Factor 6:
Domain Perceived Cooperative Political Acquisition Competitive
Strategic Measure a Selection Threat Strategies Action Strategies Aggression

1 0.84 --0.09 0.13 0.13 0.02 0.00

2 0.83 --0.01 --0.09 --0.03 0.13 0.21
3 0.79 0.14 0.05 0.02 0.24 0.12
4 0.73 --0.05 0.21 0.10 0.09 0.07
5 0.03 0.89 0.02 0.08 0.12 --0.06
6 0.05 0.86 0.05 0.14 --0.09 0.05
7 --0.04 0.79 0.17 --0.12 0.05 0.18
8 0.21 0.08 0.80 --0.01 0.12 --0.10
9 0.01 0.1 0.71 0.09 0.14 0.19
10 --0.05 0.05 0.66 0.38 --0.12 0.1
11 0.25 --0.09 0.49 0.38 0.08 --0.21
12 0.10 0.04 0.05 0.89 0.01 0.08
13 0.03 0.02 0.31 0.78 0.17 0.07
14 0.14 --0.02 0.20 0.02 0.86 0.19
15 0.27 0.10 --0.01 0.16 0.83 --0.18
16 0.05 0.10 0.08 0.18 0.04 0.81
17 0.30 0.03 --0.01 --0.06 --0.01 --0.73
Eigen Value 4.05 2.46 2.02 1.42 1.10 1.06
Explained Variable 0.24 0.14 0.12 0.08 0.07 0.06

~Nurnberscorrespondto descriptionsin Table 1.

The findings of the study clearly indicate three things about
the thrift industry during this period: (1) that environmental
management strategies as described in the literature were used
extensively; (2) that governance structure affected the use of
these strategies; and (3) that marketing decision-makers were
key players in the development and implementation of these
strategies. Moreover, reflecting differences in governance struc-
ture, relationship between risk orientation, reward systems,
moral hazard, and environmental management decision-mak-
ing revealed that stock decision-makers were more apt to
adjust and adapt to industry changes than were their mutual
colleagues.
This can perhaps best be explained in terms of the results
of the moderated regression analysis, which suggests stock
decision-makers were more affected by the perceived threat
from deregulation than were their mutual opposite numbers.
Because stock decision-makers were more directly answerable
to their principals and had remuneration tied directly to per-
formance, they seemed to be more exposed psycholo~cally to
the environmental turbulence.
The study is clearly limited by the nature of the sample.
As indicated above, the sample was selected from FIMA mem-
bership rolls. Inclusion on FIMA rolls implies both marketing
sophistication and motivation to use marketing tools more

Table 4. Regression Analysis

(3)
(1) (2) Perceived Aaj.
Dependent Variables Own Assets Threat 1"2 1"3 F-Statistic R-Square

Domain selection 0.09 0.43 -0.16 --0.36 --0.18 1.20 0.01

0.03 -- -0.13 -- 0.22 1.43 0.01
Cooperation -0.55 c -0.16 -0.37 0.06 0.86 b 1.69 0.03
-0.61 b -- -0.41 -- 0.92 b 2.81 b 0.04
Political action -0.64 b 0.39 -0.42 --0.24 0.87 b 2.00 c 0.04
-0.62 b -- -0.45 c -- 0.90 b 2.23 ~ 0.03
Acquisition 0.48 0.21 0.18 -0.06 -0.28 2.91 a 0.08
0.36 -- 0.08 -- --0.08 3.878 0.07
Competitive aggression -0.47 -0.70 -0.31 0.62 0.86 b 3.98 ~ 0.I 1
-0.41 -- -0.32 -- 0.83 5.30 a 0.I0

aSignificantat the 0.01 level.

bSignificantat the 0.05 level.
Significantat the 0.1 level.
168 J BUSh Res T. Clark and D. McKee
1997:38:161-170

Table 5. Standardized Estimates for Dependent Variable

Domain Political Competitive
Independent Variable Selection Cooperation Action Acq. Aggression

Ownership 0.04 -0.55 c -0.61 c 0.49 -0.51 c

ROA -0.07 --0.66 b -0.43 -0.52 -0.39
Assets 0.48 -0.11 0.44 0.27 -0.68
Perceived threat -0.20 -0.42 -0.43 0.16 -0.35
Ownership * ROA -0.01 0.55 0.53 0.45 0.28
Ownership * assets -0.40 -0.01 -0.27 -0.14 0.60
Ownership * threat 0.22 0.88 b 0.88 b -0.29 0.89 b
F-value 0.92 1.81" 1.63 2.61 a 3.18 a
Adjusted R-Square -0.01 0.05 0.04 0.09 0.12

~Significant at the 0.01 level.

~'Significant at the 0.05 level.
;Significant at the 0.10 level.

aggressively. As such, the study probably overstates the use
of marketing tools in the industry as a whole in managing
the environment. Nevertheless, this bias does suggest what
might be possible in other industries when marketers put
their traditional tools to new and unconventional use.
The study is also limited in its choice of method of strategy
measurement. Perhaps the central weakness of self-typing as a
strategy measure is that respondents may not provide accurate
information. It could be argued that some of the strategies
measured in this study relate more to industry-wide efforts,
and are not handled by individual S&Ls (which simply pas-
sively accept industry-wide efforts) but by trade associations
etc. On the other hand, the fact that decision-makers are asked
directly is also the method's central strength, and why it is
often preferred to other methods which a s s u m e strategic intent
without ever asking.
Although the study is limited in its application to other
industries, four general lessons for marketing theory emerge:
(1) that the domain of marketing is larger than has been tradi-
tionally believed. Although it has been argued that the firm/
environment interface is fundamentally the concern of the mar-
keting function (Zeithaml and Zeithaml, 1984), this fact seems
not to have had the impact one might expect. This study reveals,
as Zeithaml and Zeithaml suggest, that marketing decision-
makers are centrally involved in adapting the firm to its envi-
ronment and in influencing and changing the environment
to suit the firm. (2) Related to this, the study suggests a more
strategically central role for marketing decision-makers. This
point, argued conceptually by Varadarajan and Clark (1994),
is emphasized empirically in this study. (3) The study provides
grist for the emerging strategic choice/determinism debate in
the marketing literature (Varadarajan, Clark, and Pride, 1992;
Clark et al., 1994). Whereas this is an old debate in related
fields (organization theory and strategy), it is in its early stages
in the marketing literature. (4) The study raises numerous
normative and ethical questions regarding the efforts of organi-
zations to influence their environments, especially via public
relations and legislative processes. Just how appropriate was
it for S&Ls to attempt to change the public perception and
strategic parameters of the problem at a time when public
debate was heating up on the nature and extent of the S&L
crisis? Clearly, there is come conflict here between the legiti-
mate self interest of S&Ls to save themselves, the public's
right to know what was going, and the government's responsi-
bilities to conduct an impartial investigation.
Whereas the causes and consequences of the thrift disaster
for the industry, the public and the nation are unlikely to be
settled to everyone's satisfaction, numerous incidental lessons

Table 6. Means and t-Statistics by Form of Governance

Form of Governance
Strategy Mutual Stock t-Statistic

Domain selection 3.93 4.22 1.93b

Cooperation 2.40 2.50 0.49
Political action 3.11 3.18 0.70
Acquisition 2.72 3.37 3.38 ~
Competitive aggression 3.21 3.60 2.326
Perceived threat 2.62 2.69 0.40

~Significant at the 0.01 level.

hSignificant at the 0.05 level.
Environmental Management by Marketing Decision-Makers
can be learned. Among these, the environmental management
efforts of thrifts provide a rich vein for marketing theorists to
mine.
Directions for Future Research
and Conclusions
The environmental management concept suggests an ex-
panded role for marketing tools. The present study is an
attempt to examine this role empirically. In this study, we
looked at efforts of marketing decision-makers in the thrift
industry to influence their organizational environments during
the turbulent period of deregulation in the 1980s. We exam-
ined this activity in the context of insight gained through
agency theory on governance structure differences in the in-
dustry. This study highlights the need for further research in
the three directions.
First, it is important that theoretical linkages be established
between resource use, environmental management effort, and
financial and market performance. Whereas a positive rela-
tionship between environmental management and perfor-
mance is assumed in the literature, it remains to be argued
theoretically. Such models will necessarily include: (1) an esti-
mation of the contingent performance potency of the various
environmental strategies; (2) a discussion of the role of time,
time-lag, and of time horizons in environmental management
efforts; and (3) discussion of the issue of scale and resource
allocation in environmental management.
Second, further effort is needed to explore the public policy
and ethical implications of firms attempting to influence and
change environments. There is a pressing need for guidance
here. Is there a role for regulation in such matters? How much
environmental management is too much? According to which
criteria? Under what circumstances? When and how is public
welfare hurt by such efforts? Should such questions be an-
swered in the context of welfare economics or ethical debate?
If environmental management is sometimes appropriate for
profit-seeking organizations; is it ever appropriate for non-
profits or for governments?
Third, it is time for the ongoing environmental determin-
ism/strategic choice discussion to move beyond conceptualiza-
tion and model building toward empirical examination. If,
as suggested by Zeithaml and Zeithaml (1984), Varadarajan,
Clark, and Pride, 1992), and others, some things in the organi-
zation's environment are truly intractable and others truly
manageable, research is needed to identify and delineate these
classes. Presumably, some of the resources deployed by S&Ls
in the effort to influence and change the environment were
not effectual and, stemming from the nature of the situation,
probably could not have been. What type of environmental
phenomena are in fact intractable? Empirical answers to this
question would be valuable in helping firms: (1) avoid fruitless
effort; (2) focus resource deployment more effectively; and
J Busn Res 169
1997:38:161-170
(3) provide the general basis for a more rational division
of effort between adapting to and changing the organization's
environment.
All indications suggest that firms will continue to engage
in environmental management activities for the foreseeable
future. Indeed, if shifting economic and international condi-
tions did not seem to guarantee this, the fact that competitive
strategic advantage can be created through environmental
management efforts would.
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